Automatic Savings Program

ABSTRACT

A computer implemented method of processing a financial transaction executed by first person includes determining an automatic savings amount from the financial transaction by rounding up the amount of the financial transaction to the nearest dollar. The method further includes debiting the calculated savings amount from an account of the first person and crediting the savings amount to an account of a second person.

FIELD OF THE INVENTION

One embodiment of the present invention is directed to the computerprocessing of a consumer savings program. More particularly, oneembodiment of the present invention is directed to the computerprocessing of a consumer savings program that provides for automaticsavings during any transaction.

BACKGROUND INFORMATION

Many consumers feel that saving money is difficult. Those who make lessthan the median income level, or are raising families, or are newimmigrants, find it particularly challenging to put money away foremergencies, a child's education, or a special purchase. Even affluentconsumers who do have the means to save money often feel that they couldsave more.

Currently, a consumer can save funds in a bank account by makingdeposits into the account or by transferring funds from another account.Further, they can automate the savings function by setting up recurringtransfers from another account. However, the recurring transfer functionis limited by the requirement to set a specific and minimum transferamount and the need for the transfer to occur on a particular schedule.The recurring transfer function does not adequately support theflexibility of daily or small amount transfers.

In addition, grandparents or other relatives or friends sometimes desireto contribute money to somebody else's (e.g., a grandchild's) savingsaccount. These contributors likely desire an automatic and pain free wayto facilitate such a transfer of funds.

Based on the foregoing, there is a need for a system and method forautomatically facilitating savings.

SUMMARY OF THE INVENTION

One embodiment of the present invention is a computer implemented methodof processing a financial transaction executed by first person. Themethod includes determining an automatic savings amount from thefinancial transaction by rounding up the amount of the financialtransaction to the nearest dollar. The method further includes debitingthe calculated savings amount from an account of the first person andcrediting the savings amount to an account of a second person.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is an overview diagram of a system in accordance with oneembodiment of the present invention.

FIG. 2 is a flow diagram of the functionality performed by a server inaccordance with one embodiment of the present invention in order toenroll a customer in the automatic savings program.

FIG. 3 is a flow diagram of the functionality performed by a server inaccordance with one embodiment of the present invention to daily processthe automatic savings transaction.

FIG. 4 is a flow diagram of the functionality performed by a server inaccordance with one embodiment of the present invention to perform adaily posting of the automatic savings transaction.

FIG. 5 is a flow diagram of the functionality performed by a server inaccordance with one embodiment of the present invention to implement amatching process in conjunction with the automatic savings program.

DETAILED DESCRIPTION

One embodiment of the present invention is a computer implementedsavings program in which each financial transaction by a customer of abank or other financial institution automatically generates a savingsamount which is deposited in the customer's or somebody else's savingsaccount. Thus the customer can accumulate savings conveniently andpainlessly.

FIG. 1 is an overview diagram of a system 10 in accordance with oneembodiment of the present invention. System 10 includes a point of saledevice (“POS”) 12 coupled to a computer server 16 via a network 14.

POS 12 is an electronic cash register that includes a barcode reader 9that is used to read barcodes on products and to automatically enter theproducts and prices into POS 12. POS 12 further includes a card reader11 that reads account information from a credit card, debit card, or anyother type of financial device that can be used to purchase an item. POS12 may include other devices, such as a keypad, that can also be use toread account information for facilitating a transaction. In oneembodiment, POS 12 is located at a retailer.

Network 14 can be any type of network or communication device thatallows POS 12 to communicate with server 16. Network 14 includes one ormore routers or computer systems. In one embodiment, network 14 includesa computer system operated by the issuer of the credit card or debitcard/check card used to make a purchase at POS 12 (e.g., a computersystem operated by VISA).

Server 16 is a computer system operated by a bank or other financialinstitution that is implementing an embodiment of the present invention.Server 16 may be any type of computer or other device that is capable ofcommunicating with network 14 and executing software steps. In oneembodiment, server 16 includes a processor, memory and communicationinterface.

FIG. 2 is a flow diagram of the functionality performed by server 16 inaccordance with one embodiment of the present invention in order toenroll a customer in the automatic savings program. In one embodiment,the functionality of FIG. 2, and FIGS. 3-5 disclosed below, isimplemented by software stored in memory and executed by a processor. Inother embodiments, the functionality can be performed by hardware, orany combination of hardware and software.

100: Account set-up and maintenance screens/interfaces are accessed inresponse to a customer request to enroll in the automatic savingsprogram (50). In one embodiment, the screens/interfaces are accessed bybank personnel at a terminal locally or remotely connected to server 16.In another embodiment, a user may access the screens/interfaces at aterminal remotely connected to server 16 through network 14.

102: The checking account that is the source of the automatic savingsamount is selected. The eligible source accounts are displayed from thecustomer's profile (51). In other embodiments, another type of accountinstead of a checking account can be used, as long as the selectedaccount is a source of funds.

104: The types of debits/transactions that are to be “round up” areselected. “Round up” refers to one method used to calculate a savingsamount from a transaction. In one embodiment, the round up amount is anamount of excess funds produced by applying a rounder transaction to theamount of a transaction such as a credit/debit card charge at POS 12. Ifthe rounder transaction rounds up to the nearest dollar, for example, apurchase made for $54.08 would generate a rounded amount of $0.92. Otherembodiments of the present invention may round up to a predeterminedamount besides the nearest dollar. Still further, other embodiments ofthe present invention may calculate the savings amount using a methodother than round up. For example, a fixed percentage can be applied toeach transaction to calculate a savings amount, or a fixed amount ofmoney (e.g., $1.50) can be considered the savings amount. The availabledebits/transaction types to be round up are displayed (52) and caninclude only check card/debit card POS transactions, or any other typesof debits. Example of other debits that can be the subject of round upor other calculation of a savings amount include paper checks,electronic bill pay, electronic checks, automatic payments and AutomatedClearing House (“ACH”) transfers.

106: The recipient account or accounts for the savings amount isselected based on the displayed eligible recipient accounts and % fieldsor the account number can be inputted. In one embodiment, possiblerecipient accounts include the customer's own savings account, person toperson transfer (e.g., a grandparent's round ups being credited to agrandchild's savings account or 529 college savings plan), charities,investment accounts, etc. In general, any account that can accepttransfers can be eligible for selection. If multiple recipient accountsare selected, the customer can choose a percentage distribution for eachof the accounts, or another mechanism that can be used to divide thesavings amount between the multiple accounts.

108: The name to display on the recipient's account statement as thesource of the transfer is input. The name may be customized to a maximumnumber of characters or may default to a pre-set description. Forexample the account statement might state “a Transfer From Grandma”.

110: The customer is given disclosures that for example, describe thecustomer's selections and the legal ramifications of such selections.

An embodiment of the present invention also allows the customer tomodify parameters or discontinue enrollment at any time remotely usingan online banking feature or other remote computing technology.

FIG. 3 is a flow diagram of the functionality performed by server 16 inaccordance with one embodiment of the present invention to daily processthe automatic savings transaction.

200: The debit to the source account (e.g., check card POS, check, etc.)selected at 102 is authorized.

202: The debit transaction, such as a purchase at POS 12 using a debitcard, is processed.

204: The debit transaction is posted to the source account.

206: The daily posting transaction begins.

208: The round up amount (or other savings amount) for each eligibledebit transaction is determined. This occurs on a daily basis.

210: All round up amounts are aggregated. This occurs on a daily basis.By aggregating the round ups for one daily posting, overdrafts to thesource account can be avoided. In one embodiment, the daily postingoccurs at the end of the day to further avoid overdrafts.

212: A determination is made if funds are available in the sourceaccount. If not, the aggregated round up debit transaction is cancelled(214) and a $0.00 transaction is created with a no funds in sourceaccount descriptor (216).

FIG. 4 is a flow diagram of the functionality performed by server 16 inaccordance with one embodiment of the present invention to perform adaily posting of the automatic savings transaction.

300: If funds are determined to be available at 212, the aggregatedround up debit transaction is posted.

302: The credit transaction is created.

304: A determination is made if the recipient account(s) selected at 106is valid. If it is valid, the credit transaction is posted (310).

306: If the recipient account(s) is not valid at 304, the credittransaction is returned to the source account and a $0.00 transaction iscreated with a status descriptor. A report of the invalid source accountis sent to an “exceptions & returns” file and enrollment of theautomatic savings account for that customer is terminated (312, 314).

316: Monthly statements are generated that include the automatic savingsfunction. Both the source and recipient accounts may display amonth-to-date and year-to-date summary of round up transfers on theirstatements.

FIG. 5 is a flow diagram of the functionality performed by server 16 inaccordance with one embodiment of the present invention to implement amatching process in conjunction with the automatic savings program. Abank or other organization can implement the matching process in orderto encourage more customers to enroll in the automatic savings program,or to encourage customers to modify their behavior for the benefit ofthe bank, such as to use their debit cards more often, use checks less,switch to electronic statements, use check safekeeping, etc. The bankcan offer to match the round up or other savings amount for a fixed timeperiod, a permanent time period, or other type of arrangement (e.g.,every 10th transaction, $0.05 for every transaction, etc.).

400: During the daily posting process of FIG. 4, or at another point inthe process (e.g., quarterly, annually, etc.), the customer data filefor the automatic savings program is pulled. The data file stores alltransactions eligible for matching and other data, such as the length ofenrollment for the customer, that can be used to determine if thecustomer has met the matching incentive criteria.

402: It is determined if the customer met the matching incentivecriteria. If not, the matching process is ended (408).

404: If the customer meets the matching incentive at 402, the matchingfunds credit transaction is calculated. The matching funds is thenposted to the recipient account (406).

As disclosed, an automatic savings program in accordance to embodimentsof the invention provides an easy and automatic method for a customer tosave, and can encourage increased savings.

Several embodiments of the present invention are specificallyillustrated and/or described herein. However, it will be appreciatedthat modifications and variations of the present invention are coveredby the above teachings and within the purview of the appended claimswithout departing from the spirit and intended scope of the invention.

1. A method of processing a first financial transaction of a firstperson comprising: determining a savings amount based on at least thefirst financial transaction; debiting the savings amount from a sourceaccount of the first person; and crediting at least a part of thesavings amount to a first recipient account of a second person.
 2. Themethod of claim 1, wherein the crediting at least a part of the savingsamount comprises: crediting a first percentage of the savings amount tothe first recipient account; and crediting a second percentage of thesavings amount to a second recipient account.
 3. The method of claim 1,wherein debiting the savings amount occurs on a daily basis and is basedon a aggregate savings amount from a plurality of financialtransactions.
 4. The method of claim 3, further comprising: determiningif adequate funds are available in the source account before debitingthe savings amount.
 5. The method of claim 1, wherein the savings amountis determined by rounding up a value of the financial transaction to anearest predetermined value to calculate a rounded up amount, and thesavings amount is equal to the rounded up amount.
 6. The method of claim1, further comprising: crediting a matched amount to the first recipientaccount.
 7. The method of claim 1, further comprising: providing anidentity of the first person to the second person as a source of thesavings amount.
 8. A method of automatic savings comprising: executing afinancial transaction for a first account; calculating a savings amountbased on the financial transaction; debiting the savings amount from thefirst account; crediting a first portion of the savings amount to asecond account; and crediting a second portion of the savings amount toa third account.
 9. The method of claim 8, wherein the first account andthe second account are owned by different entities.
 10. The method ofclaim 8, wherein the debiting the savings amount occurs on a daily basisand is based on a aggregate savings amount from a plurality of financialtransactions.
 11. The method of claim 8, further comprising: determiningif adequate funds are available in the first account before debiting thesavings amount.
 12. The method of claim 8, wherein the savings amount isdetermined by rounding up a value of the financial transaction to anearest predetermined value to calculate a rounded up amount, and thesavings amount is equal to the rounded up amount.
 13. The method ofclaim 8, further comprising: crediting a matched amount to the secondaccount.
 14. The method of claim 8, further comprising: providing anidentity of the first account to the second account as a source of thesavings amount.
 15. The method of claim 12, wherein the nearestpredetermined value is a nearest whole dollar amount.
 16. A computerreadable medium having instructions stored thereon that, when executedby a processor, cause the processor to: determine a savings amount basedon at least a first financial transaction; debit the savings amount froma source account of a first person; and credit at least a part of thesavings amount to a first recipient account of a second person.
 17. Thecomputer readable medium of claim 16, wherein the credit at least a partof the savings amount comprises: credit a first percentage of thesavings amount to the first recipient account; and credit a secondpercentage of the savings amount to a second recipient account.
 18. Thecomputer readable medium of claim 16, wherein the debit the savingsamount occurs on a daily basis and is based on a aggregate savingsamount from a plurality of financial transactions.
 19. The computerreadable medium of claim 16, said instructions further causing saidprocessor to: determine if adequate funds are available in the sourceaccount before debiting the savings amount.
 20. The computer readablemedium of claim 16, wherein the savings amount is determined by roundingup a value of the financial transaction to a nearest predetermined valueto calculate a rounded up amount, and the savings amount is equal to therounded up amount.
 21. The method of claim 1, further comprising:determining whether a matching program is still in effect beforecrediting.
 22. A method of processing a first financial transaction of afirst person comprising: determining a savings amount based on at leastthe first financial transaction; debiting the savings amount from asource account of the first person; crediting a first portion of thesavings amount to a first recipient account; and crediting a matchedamount to the first recipient account.
 23. The method of claim 22,further comprising crediting the matched amount only if it is determinedthat the first financial transaction is eligible to be matched.
 24. Themethod of claim 22, further comprising crediting the matched amount onlyif it is determined that a predetermined time period has not beensurpassed.
 25. The method of claim 22, wherein the matched amountapproximately equals the savings amount
 26. The method of claim 22,wherein the matched amount equals a predetermined amount.
 27. The methodof claim 22, wherein the first recipient account is owned by a secondperson.
 28. The method of claim 22, further comprising crediting asecond portion of the savings amount to a second recipient account. 29.The method of claim 22, wherein debiting the savings amount occurs on adaily basis and is based on a aggregate savings amount from a pluralityof financial transactions.